A major shake-up of one of the government’s central health policy reforms to devolve greater power to GPs and deliver higher quality services to local communities is urgently needed, concludes a two-year study of practice-based commissioning published today by The King’s Fund.

Practice-based commissioning: reinvigorate, replace or abandon? says Lord Darzi’s recent review of the NHS was right to commit the government to persevering with practice-based commissioning as, if implemented well, it has the potential to help GPs plan and deliver better and more accessible services to patients, provide more choice of treatment and to use financial resources more effectively.

However, it concludes the policy has so far proved to be an expensive investment that has delivered little in terms of better services for patients or financial savings for the NHS since its introduction in 2005. Progress has been slow and appears to be stalling completely in some areas - very few GPs are using it to commission new services despite family doctors having been paid almost £100 million in incentives payments alone. The report warns the government must commit to a fundamental reassessment of the policy and tackle waning enthusiasm among GPs if it is to build on the limited progress the scheme has made.

Analysis by The King's Fund reveals that many of the barriers that have stalled progress should have been predicted given the experience of the previous Conservative government in the 1990s when it devolved budgets to family doctors through GP fundholding and its variants. Lessons that could have been learnt included problems with engaging GPs; the need to give GP commissioners the freedom to contract independently by handing them real budgets for specific areas; and the importance of investing in managerial capacity to support and lead the process by ensuring the right skills, data systems and governance arrangements are in place. The fall-out from NHS reorganisations and the impact of financial deficits have also hamstrung innovation and progress.

'Practice-based commissioning has the potential to deliver better services for patients and financial savings for the NHS, but progress has been painfully slow over the past three years. As a policy established to pump-prime the transition of care out of hospitals by investing in alternative care in local communities it has so far failed due to a lack of real investment, leadership, ambition and drive. The NHS must harness what remains of the limited enthusiasm of GPs and commit to a fundamental redesign of the policy if it's to live up to its potential.'

Niall Dickson, Chief Executive at The King's Fund, added:

'The government is right to keep faith with practice-based commissioning but it must be prepared to set a clear direction, define the commissioning roles of both primary care trusts (PCTs) and practices, ensure GPs have access to the support they need to make it work and put in place the correct incentives. Now is the time for a fundamental reassessment of the policy.'

The report is based on an in-depth, two-year analysis of practice-based commissioning in four PCT areas in England, with the findings and conclusions tested in an expert seminar with key policymakers and health professionals. It found a strong commitment to making practice-based commissioning work but very few GPs were using it to deliver new services for their patients. GPs in the study had limited time to engage in the policy and often lacked the skills and health care information they needed to make it work – they needed far greater support than was being provided by their PCTs. There was also concern over conflicts of interest in the role of GPs as both providers and commissioners of services, potentially restricting patient choice.

The policy had helped to improve relationships between GPs and PCT managers in some cases but, in other areas, it had caused already poor relationships to deteriorate further. The lack of national guidance from the government had compounded these problems and had led to widespread disagreement between GPs and PCTs over their roles and responsibilities. There was also a strong feeling that the breakdown in relationships between the government and medical profession over the past year had discouraged some GPs and PCTs to invest enough time and energy in the policy.

The report makes a number of recommendations to overcome these barriers including the following.

The government should set out a clear vision for the future of practice-based commissioning and provide national guidance for GPs and PCTs – that can be translated locally – on how best to implement the policy.

The government should develop a new approach to commissioning where PCTs maintain responsibility for strategic, population-wide commissioning but be informed by GPs and other clinicians, while real budgets for specific services should be devolved to GPs and groups of practice-based commissioners, providing them with more freedom and stronger incentives to develop innovative services for patients.

High performing GPs and practice-based commissioning groups should be rewarded with increased independence but should not become responsible for the entire health care budget. Budgets should only be devolved for tightly defined areas so that GPs can only commission specific services directly, which would reduce clinical and financial risks.

Conflicts of interest in the role of GPs being both providers and commissioners of care should be tackled head on through robust governance arrangements to ensure that patient choice and the quality of GP referrals are not compromised and that clinical risk is managed.

Notes to editors

For further information or interviews, please contact The King’s Fund press office on 020 7307 2585, 020 7307 2632 or 020 7307 2581. An ISDN line is available for interviews on 020 7637 0185. Embargoed copies of the report are available.

Practice-based commissioning: reinvigorate, replace or abandon?, by Natasha Curry, Nick Goodwin, Chris Naylor and Ruth Robertson is free to download from The King's Fund website. The report represents one of the most significant studies of practice-based commissioning since its introduction in 2005. The policy was not subject to a trial or pilot phase and a formal evaluation of the initiative has only recently been commissioned by the Department of Health – this is not due to be published until 2010. As a result, the evidence on how practice-based commissioning has influenced the care provided in local communities is limited.

GP fundholding ran from 1991–1997 as a voluntary scheme within which GPs could purchase elective care with a real negotiated budget from health authorities whilst simultaneously managing a prescribing budget. Variations to GP fundholding over this period, such as Total Purchasing Pilots (1994–7), enabled GP practices to extend their responsibility for managing budgets to non-elective care, though in most cases these used indicative budgets as financial responsibility remained with health authorities. The election of a New Labour government ended the experiment with all forms of GP-led purchasing – primarily on the grounds that it increased transaction costs and promoted two-tier access to care.

The Audit Commission estimated that £98 million of incentive payments had been made to GP practices involved in practice-based commissioning in 2006/7 alone. About half was associated with signing up to accepting an indicative budget and the rest conditional on developing local PBC plans (Audit Commission, Putting commissioning into practice, November 2007).

The King’s Fund seeks to understand how the health system in England can be improved. Using that insight, we help shape policy, transform services and bring about behaviour change. Our work includes research, analysis, developing leaders and improving services. We also offer a wide range of resources to help everyone working in health share knowledge, learning and ideas.